Another delay for baricitinib as FDA calls for more clinical data

The US Food and Drug Administration has issued a complete response letter for the New Drug Application (NDA) of the investigational medicine baricitinib, a once-daily oral JAK inhibitor for the treatment of moderate-to-severe rheumatoid arthritis (RA), reported the drug’s developers, Eli Lilly (NYSE: LLY) and Incyte (Nasdaq: INCY).

The letter indicates that the FDA is unable to approve the application in its current form. Specifically, the agency indicated that additional clinical data are needed to determine the most appropriate doses. The FDA also stated that additional data are necessary to further characterize safety concerns across treatment arms. The companies disagree with the agency's conclusions. The timing of a resubmission will be based on further discussions with the FDA.

ChemSpider 2D Image | Baricitinib | C16H17N7O2S

There was no immediate investors’ response to the news as stock markets in the USA and many other countries were closed on Friday. However, by late-morning trading on Monday Incyte was down 10.95% to $125.42 and Lilly declined 3.97% to $82.47.

Follows previous three-month setback

This is the second stumble in the US approval path for baricitinib, as in January, the US Food and Drug Administration determined that supplementary data submissions from Lilly constituted a Major Amendment to its NDA, setting back the review date by three months. The drug was approved in February this year in Europe under the trade name Olumiant. Assuming it gains US approval, analysts project that sales of baricitinib could reach $1.8 billion in sales by 2022.

Olumiant appears to have a better safety profile than Pfizer’s (NYSE: PFE) twice-daily JAK inhibitor Xeljanz (tofacitinib) and would have been preferred by doctors on an approval by the FDA, according to Barclays analyst Geoff Meacham. Xeljanz generated global sales in 2016 of $927 million.

"We are disappointed with this action. We remain confident in the benefit/risk of baricitinib as a new treatment option for adults with moderate-to-severe RA," said Christi Shaw, president of Lilly Bio-Medicines, adding: "We will continue to work with the FDA to determine a path forward and ultimately bring baricitinib to patients in the US."

Lilly is reaffirming both its financial guidance for 2017 and its mid-term guidance for the remainder of this decade. Incyte is evaluating the impact of the complete response on its previously-issued milestone and R&D expense guidance for 2017; any update will be provided on its first-quarter 2017 earnings call.



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